Research Round-up July 2023
Global Broadband Subscriptions in Q1 23; UK TV and Broadband Services Research Q2 22 – Q2 23; UK telecoms sector updates; ISP news; government and Ofcom updates
Point Topic’s key publication of the month:
Global Broadband Subscriptions in Q1 2023: Fibre Glides Past Two Thirds
As of Q1 2023, the global fixed broadband connections reached 1.377 billion, reflecting a growth rate of 1.59% compared to Q4 2022. We recorded a decline in fixed broadband subscriptions in 18 countrieswhich mainly include emerging markets, as well as some saturated markets such as Singapore. However, while there were fluctuations in growth rates across regions and markets, the overall trend indicates a steady expansion of global broadband connectivity.
Among global regions, Africa, East Asia and America Other saw the fastest growth in broadband connections (2.9%, 2.2% and 1.8%), not least due to healthy increases in broadband subscribers in the vast markets of Egypt, Brazil and China.
The share of FTTH/B in the total fixed broadband subscriptions continued to increase and stood at 66.7%. Broadband connections based on other technologies saw their market shares shrink further, with an exception of satellite and wireless (mainly FWA).
VDSL subscriber numbers grew in ten countries, while they dropped in at least 22 markets as consumers migrated to FTTH/B.
The highest FTTH/B broadband subscriber growth rates in Q1 2023 were in Algeria, Peru and UK.
Global Fixed Broadband Subscribers on the Rise
Global fixed broadband subscribers have been growing steadily over the past several quarters. During Q1 2023, their number increased by 1.59%, reaching 1.377 billion, which suggests a sustained demand for broadband connectivity worldwide (Figure 1 and Table 1). At 21.6 million, the quarterly net adds were close to the figure we recorded a year ago, though the growth rate (1.59%) was slower, compared to 1.77% in Q1 2022, with global inflation and economic instability having an impact.
Between Q1 2022 and Q1 2023, the global landscape of broadband technologies witnessed significant shifts. The number of copper lines experienced further decline of 9.6%, while FTTH/B connections saw growth of 11.2% (Figure 2), as consumers continued to show preference for more advanced options and transition away from older and slower technologies. Cable broadband exhibited modest growth at 0.5%, maintaining relevance in certain markets.
Satellite broadband also saw a modest growth of 1.3% while wireless broadband demonstrated continued relevance with a respectable growth rate of 4.9%. These trends can be attributed to the demand for connectivity in remote or underserved areas where traditional broadband infrastructure is not feasible.
Read the complete article in our free analysis here.
Point Topic's UK TV and Broadband Services Research Q2 22 – Q2 23
Since March 2022, Point Topic has commissioned YouGov to conduct surveys on the take-up of bundles TV services, fibre to the home/premises (FTTH/P) access amongst subscribers, the impact of TV/streaming services on consumer decision-making, take-up of broadband packages by tier speeds, ISP market shares, ISP churn rates, along with consumers' propensities to change ISPs for bespoke bundled TV and broadband services. This market research provides insight into the UK consumer's pay-TV and broadband consumption and preferences in the context of an increasingly competitive full fibre network provider sector with a wealth of online video and TV content offerings readily available.
Point Topic has created each survey question set with uniformity in mind, however, given the nature of the marketplace, questions have been altered on a quarterly basis accordingly. When referring to FTTH/P statistics in this report the results have been filtered to those respondents who have indicated they are subscribing to a full fibre broadband connection.
Major players dominating full fibre subscriptions, uptake to faster speed packages on the rise, and bundled broadband and TV packages growing in popularity
Fluctuations in market shares among different FTTP providers from Q4 22 to Q2 23 demonstrate that consumers are finally getting to grips with full fibre terminology, although care should be taken as Virgin Media O2's (VMO2's) network is predominately DOCSIS 3.1 technology and covers around 16.3m premises with its FTTP network footprint covering around 3.3m premises (Figure 1).
BT and Virgin Media experienced overall increases in market share and both closed off Q2 23 with a 22% and 30.5% market share respectively; Sky (20%), TalkTalk (7%), Plusnet (3%), EE (4%), and others had mixed results with slight fluctuations. Vodafone showed a significant increase in market share coming in at 8.7% and the proportion of respondents who don't know or can't recall their provider decreased over time.
We asked Q4 22 and Q2 23 survey respondents which broadband speed tiers they were subscribed to and then analysed the results by FTTP and non-FTTP subscribers (Figure 2).
For FTTP subscribers packages offering downlink speeds of 101 Mbps or higher were the popular choice with 38% of respondents in Q4 22 taking this speed tier compared to 36% in Q2 23.
For both quarters there was near parity for both FTTP and non-FTTP subscribers on a 25 - 100 Mbps service; in Q4 22 33% were FTTP connections and 31% were non-FTTP, and in Q2 23 both types of connectivity subscriptions were equal at 35%.
The percentage of respondents with a TV/video bundle shows an increasing trend over the quarters, starting at 35% in Q2 2022 and rising to 43% in Q2 2023. This 8% increase y-o-y shows that despite the ongoing cost of living crisis, consumers are opting for curated TV/video and broadband packages.
Conversely, the percentage of respondents without a bundle shows a decreasing trend over the quarters, starting at 55% in Q2 2022 and declining to 50% in Q2 2023 (Figure 3).
BDUK Project Gigabit Update
On 3 July, BDUK announced that it had awarded CityFibre Phase 1b’s Lot 2 Suffolk, Lot 7 Norfolk, and Lot 27 Hampshire contracts. The five year contract which is backed by £320m in government funding with CityFibre adding £170m in private investment to the projects. Construction in the locations are due to commence in January 2024 and aims to cover around 218k rural premises across the three counties.
On 31 July, BDUK announced the commencement of the procurement phase for the award of their first Cross-Regional Supplier Framework (Type C) contract, which could see a single network operator being picked to help cover some of the most hardest to reach rural areas.
Other key telecoms sector news items from the month can be found below.
BT Group News
6 July – Openreach hit Welsh milestone as £210m ultrafast broadband network reaches 700k premises. 10 July – Group Chief Executive, Philip Jansen, informed the Board that at an appropriate moment over the next 12 months he intends to step down from his role. On 31 July BT Group announced the appointment of Allison Kirkby as Chief Executive. She will take over from Philip Jansen as Chief Executive around the end of January 2024 at the latest. 11 July – Openreach announced it has started its additional FTTP network rollout in Grimsby and Healing. More than 7,500 homes and businesses can already access the new technology, with the build expected to reach the majority of premises over the next 12-18 months. 13 July – Openreach announced GEN040/23 Notification of tranche 9, 41 FTTP priority exchanges, stop sell implementation 08 August 2023. With a Realignment of 35 notified exchanges from tranche 9. GEN039/23 Notification of product stop sells, Tranche 13 in 18 FTTP exchanges was also announced, bringing the total of notified exchanges to 846 including the Salisbury trial site. 14 July – Openreach announced the introduction of a fixed price for Site Specific Risk Assessment Method Statement (SSRAMS) on FTTP for provision orders effective from 16 October 2023. It will be aligning some existing products to this fixed price for SSRAMS also effective from 16 October 2023: These include:
SOGEA, (including SOGfast);
Ethernet (excluding Optical Spectrum Services);
and Dark Fibre, replacing the Time Related Charges (TRCs) method that currently applies to those products on provision and repair order journeys.
FTTP, SOGEA /SOGfast exclude provision orders placed on a Standard Connection. Copper products are excluded from this change and will remain on Time Related Charges (TRCs) for SSRAMS including WLR, MPF, ISDN2 and ISDN30. 17 July – Openreach announced price changes to ECC and PIA ancillary items. These changes include price decreases and price increases. Price decreases will be effective from 15/08/2023, and price increases will be effective from 16/10/2023. This briefing supports ACCN OR862. 19 July – BT’s new home phone service, Digital Voice, to be rolled out across Yorkshire and the Humber. 21 July – BT and OneWeb deliver high-speed satellite connectivity to Lundy Island. 25 July – Openreach announced that Premium Business Helpdesk eChat support is stopping on 21/08/23. Helpdesk support will continue via the formwize. 26 July – BT Group to launch Electric Vehicle charging pilots. The first phase of the EV charging pilots, open to Openreach and BT Group colleagues, is planned to kick off in Northern Ireland in the Autumn of 2023, and will be expanded to the public with more pilot locations added across the UK later in the year. 27 July – BT Group published its trading results up to 30 June 2023. Openreach’s FTTP footprint expanded to 11m premises, 44% completion of 25m target, with a further c.6.2m where initial build is underway; 718k premises were passed in the quarter at an average build rate of 55k per week. Customer demand in Openreach for FTTP increased with Q1 orders up 34% year-on-year and net adds of 383k, bringing network take-up rate to 32%; total FTTP connections grew to 3.5m. 31 July – Openreach announced its NGA2018/23 special offer for FTTP proactive same CP upgrades. The special offer to assist CPs in undertaking Proactive Upgrade projects to accelerate take-up of FTTP. Openreach has worked with industry to develop a process to facilitate Proactive Upgrades. This briefing provides 28 days’ notice of a time-limited special offer for the period 28 August 2023 to 31 March 2024 to rebate the first appointment amendment and standard cancellation charges for FTTP orders where the orders are part of Proactive Upgrades and meet the criteria set out in the Briefing. 31 July – Briefing NGA2019/23 announced to inform all CPs about a trial commencing on 28 August 2023 for a 6-month period in London only, the purpose of the trial is to test the designed Plan and Build, Lead 2 Cash, and Trouble 2 Resolve processes for soundness of use and also the overall take up of FTTP within commercial premises.
Virgin Media O2 (VMO2) News
3 July – Virgin Media announced that its customers with Virgin TV 360 or Stream can now access thousands of popular TV shows and must-watch movies from Pluto TV, directly via their set-top box – all at no extra cost. 17 July – The UK Infrastructure Bank announced it has made a £250m debt investment in new next generation fibre broadband company nexfibre which is rolling out full-fibre broadband to 5m homes across the UK by 2026. 20 July – Virgin Media O2 announced low-income families can stay connected and online over the summer holidays with free O2 mobile data from the National Databank. 20 July – From now until 30 August Virgin Media O2 is offering new subscribers broadband, Sports + HD package for £534 less than Sky, with a Netflix subscription service included. 21 July – Virgin Media O2 announced it is upgrading its WiFi guarantee to offer its customers minimum download speeds of 30Mbps in every room of their home or £100 credit back. Previously promising minimum download speeds of 20Mbps, Virgin Media customers can now benefit from a boost for the same price, with an enhanced promise of 30Mbps in every room. 25 July – VMO2 published its Q2 2023 trading results and reported fixed network deployment into new locations accelerated with build, primarily on behalf of nexfibre, of 175,500 additional premises in Q2 2023, up from 107,800 in Q1 2023. This took VMO2’s total gigabit footprint to 16.4m homes serviceable. In June, the company switched on its services for the first time over the nexfibre network utilising XGS-PON technology. Services currently mirror Virgin Media’s existing broadband tiers and TV Stream availability, with further product enhancements to come. Deployment of full fibre across the existing Virgin Media O2 network continued to increase in Q2, and the company remains on track to upgrade its entire fixed network in 2028. Virgin Media O2’s combined FTTP footprint reached 3 million homes at the end of Q2, and is set to extend towards 4 million by the end of 2023. 28 July – Virgin Media has partnered with A+E Networks EMEA, All3Media International, Banijay Rights, Blue Ant Media, Extreme International, Fremantle, Little Dot Studios and Tastemade to provide its customers with a selection of new themed channels that will be fully integrated within Virgin Media’s Electronic Programming Guide (EPG). The new Free Ad-Supported Streaming TV channels (FAST) will be available to all Virgin TV customers at no extra cost from next month. The move represents Virgin Media O2’s ambition to meet the evolving viewing habits of its customers, expanding its catalogue of streamed content and providing an opportunity to monetise FAST through targeted, dynamic advertising.
1 July – CF has been awarded three new contracts under the government’s £5bn Project Gigabit programme. These will subsidise the rollout of ‘gigabit capable’ infrastructure to 218k rural properties in Norfolk, Suffolk and Hampshire. CityFibre has secured four Project Gigabit contract awards to date, totalling £387m in government subsidies to reach 262,000 homes. This has been supported by nearly £223m of committed private investment from CityFibre, representing a combined total investment in Project Gigabit’s target areas of £610m. 12 July – CF announced work is being carried out on its £42m FTTP network rollout in South Tyneside. Locally, the rollout is being completed by GCU UK Ltd. And the project is expected to be completed by 2025 but the first services will go live for people to take advantage of much sooner. 12 July – CF announced the launch of its wholesale 2.5 Gbps symmetrical consumer broadband product. The new 2.5 Gbps product is being made available to its Internet Service Provider (ISP) customers on a rolling basis, starting in CityFibre’s most mature XGS-PON deployment areas, before reaching all homes in the coming months. The new platform is capable of supporting symmetrical speeds of up to 10 Gbps and is designed to be easily upgraded to 50G PON. By the end of 2023, CityFibre expects to have deployed its XGS-PON equipment into over 90% of its fibre exchanges with the new 2.5 Gbps product becoming available to around 20% of its ready for service footprint, currently standing at 2.5m homes.
Independent Operators (AltNets) News
3 July – Wildanet announced it is to accelerate and extend the rollout of its full fibre gigabit broadband network in Cornwall and Devon with the announcement of an additional £50m of private equity funding from sustainable infrastructure investment specialists Gresham House. 5 July – Borderlink, trading as GoFibre, was awarded the £7.3m contract last Autumn and has spent the last six months planning and surveying for the build alongside the Department for Science, Innovation and Technology (DSIT) and Northumberland County Council, has now started construction to connect 3,750 hard to reach rural premises in the area. 6 July – Netomnia announced it had passed, and made Ready for Service (RFS), more than 500k homes and businesses as part of its ultrafast full-fibre rollout. The milestone demonstrates Netomnia’s exponential growth, with the business passing more than 125k properties in Q2 of 2023 alone. The network operator is now building at a rate of 500k homes and businesses per year, with ambitions of reaching 1 million premises by early 2024. On 19 July, the supplier announced that it would be expanding into Faversham, Kent with the aim of passing 10k premises. 7 July – LightSpeed Group announced following a period of restructuring, one of LightSpeed’s existing shareholders, Kompass Kapital, who first invested in the company in February 2021, has acquired 100% of the share capital from the Atmosclear Investments Group giving them an overall controlling stake in the business. As part of this transaction Kompass Kapital has also committed new capital to the business, which will be utilised to develop & expand the company’s high speed fibre network while also enhancing the company’s ISP platform. 10 July – Digital Infrastructure announced that it is expanding into 5 new locations in South Yorkshire, including areas of Thurnscoe, Barnburgh, Bolton upon Dearne, Goldthorpe, and Harlington. The supplier will work alongside broadband retailer and sister company, BeFibre, to begin work to get homes ready for service. With a phased roll-out programme planned, it is expected that Thurnscoe and the surrounding areas will be BeFibre broadband-ready in Autumn 2023. 18 July – Ricoh UK has been selected to support KCOM in delivering its £17m copper to fibre phone network switchover to homes and businesses across Hull and East Yorkshire. 12 July – B4RN has partnered with Smartoptics to upgrade its rural UK core network to 400 Gbps. The upgrade project will make the network future-proof through 2030 with flexible and cost-effective network solutions. The upgrade project aims to support 400 Gbps in the rural core network with new dark fibre extending about 650 km creating a ring around the north of the UK between Manchester, Newcastle and Leeds. 18 July – Giganet (Cuckoo) announced it has completed the first phase of its FTTP rollout in England. 18 July – Digital Infrastructure has partnered with global supply chain solutions provider Wesco Anixter to support its ambitions of delivering a full fibre network, with over 400K homes in the current planning and build phases, with more to follow. 19 July - G.Network announced that USS, its principal equity investor, is providing investment of up to £150m to accelerate the next phase of growth. 21 July – Freedom Fibre eye up possible deal for VXFIBER’s UK FTTP network. 28 July –GoFibre (BorderLink) announced it has passed 50k in Scotland and launched a new £50k fund to support charitable and community projects across three of its build regions in Scotland.
6 July – Ofcom announced sharing 6 GHz spectrum for Wi-Fi and mobile services. The regulator announced it is looking to identify appropriate hybrid sharing mechanisms to facilitate coexistence between licenced mobile and Wi-Fi in this band. They are also pressing for international harmonisation of hybrid sharing in this band, to enable economies of scale for equipment. Ofcom are inviting comments on this approach by 15 September 2023. 11 July – Vodafone partners with Qwilt and Cisco to deploy open caching, improving streaming services for millions of customers across the UK. 11 July – Ofcom announced that it is seeking evidence on the research it will need to carry out to prepare our advice to Government on categorising regulated services under new Online Safety laws. Ofcom will set out guidance and codes of practice on how companies can comply with their duties. 13 July – Ofcom opened an investigation into Virgin Media following complaints from customers that the company is making it difficult for them to cancel their services. 18 July – Report finds UK gigabit broadband and 5G rollout needs more collaboration. A new report from the Digital Connectivity Forum (DCF), an industry think-tank, has found that UK’s rollout of gigabit-capable broadband and 5G mobile connectivity would benefit from improvements in communication, collaboration and consistency between local authorities and the telecoms industry. 27 July – Ofcom published the latest figures for complaints it has received about the UK’s main landline, mobile, broadband and pay-TV providers. This latest quarterly report covers the period from January to March 2023. During this period, complaints to Ofcom increased slightly on the previous quarter (October to December 2022), with slight increases in complaints about landline, broadband, pay-monthly mobile and pay-TV services. TalkTalk was the most complained-about landline and broadband provider, with an increase in complaints for both of these services since last quarter.
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It is possible there will be restatements in the coming quarter/s and single period data should be viewed in that light.